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FINMA, the financial-markets regulator in Switzerland, proposed rules that would require bonuses to be tied more closely to long-term profits. Swiss bankers expect other regulators in Europe to follow FINMA's lead but are concerned that if they do not, Swiss banks will be at a disadvantage. The Financial Stability Forum made a similar proposal in April. FINMA also wants remuneration to be more transparent.

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A large budget deficit will result in a sustained economic crisis, Federal Reserve Chairman Ben Bernanke said in congressional testimony. While acknowledging that Congress and the Obama administration were using the deficit to address short-term problems, Bernanke warned that "unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth." The deficit is expected to double to more than 82% of the U.S. economy by the end of the next decade.

Alexander Justham, director of markets at the U.K. Financial Services Authority, added to concerns about diverging regulations for over-the-counter derivatives markets across the Atlantic. Justham said he does not expect OTC derivatives to quickly move onto exchanges in the U.K., while U.S. officials are pushing the move. "The trend ... towards greater transparency in this space is inevitable. Whether that means it's all on exchange, I don't think we are yet in that space," Justham said.

FINMA, the financial-markets regulator in Switzerland, proposed rules that would require bonuses to be tied more closely to long-term profits. Swiss bankers expect other regulators in Europe to follow FINMA's lead but are concerned that if they do not, Swiss banks will be at a disadvantage. The Financial Stability Forum made a similar proposal in April. FINMA also wants remuneration to be more transparent.

The Obama administration plans to explain its proposal to reform financial regulation June 17, a source said. The plan is expected to be a blueprint for Congress as lawmakers try to restructure oversight of financial institutions and securities. On June 18, U.S. Treasury Secretary Timothy Geithner will testify before a House panel about the proposal, the source said. Lawmakers and the administration are striving to pass regulatory reform legislation by the end of the year.

Jean-Claude Trichet, president of the European Central Bank, has been attempting to resolve the disagreement between ECB policymakers over the asset purchases. Signs that the European economy is starting to recovery might help Trichet in his efforts. "The end of the free fall of the global economy might just get the ECB off the hook here," said Nomura International economist Laurent Bilke. "Things are looking up, and the hawks will be not be easily convinced that more needs to be done."